Hunnu Coal (ASX: HUN) has acquired a 90% interest in the Tsant Uul Coal Project with the aim of becoming a major force in the development of coal deposits in the world class South Gobi coal province.
The Tsant Uul Coal Project covers over 59,000Ha of area in the South Gobi Coking Coal Province. The project is located only forty kilometres to the south of the giant six billion tonne Tavan Tolgoi coking and thermal coal deposit and approximately 6km from the existing coal haulage road to China.
The company said the Tsant Uul Coal Project will be greatly advantaged by the massive infrastructure projects currently being proposed and developed at the nearby Oyu Tolgoi Copper Gold Project, the Tavan Tolgoi Coking Coal Deposit and the expansion projects at the UHG Coking Coal Mine.
The Tavan Tolgoi Coking Coal Field is estimated to contain over six billion tonnes of coking and thermal coal in the South Gobi region of Mongolia. Energy Resources LLC mines approximately two million tonnes of raw coking coal from its UHG Mine which is located 45 kilometres to the north of Hunnu Coal’s Tsant Uul Coal Project.
Energy Resources has stated that it plans to increase the production at the UHG Mine to five million tonnes in 2010, while building a five million tonne coal washing plant and power plant on its mine site.
Hunnu said due diligence at Tsant Uul has included the drilling of seven diamond core drill holes for approximately 960 metres. Five of the drill holes intersected multiple coal seams, ranging from 1 metre to 22.8 metres in thickness with partings.
Coal was intersected as close as 7.8 metres from the surface. Core samples have been submitted for test work and results are pending. Based on this drilling the company has estimated an exploration target of 50Mt and 100Mt of coal for project.
Previous drilling undertaken on the project intercepted 1m to 16m thick coal seams. Coal quality parameters included: Total Moisture = 5%, Ash = 8.34%, Volatile Matters = 33.6%, Fixed Carbon = 58.1%, Sulfur = 0.39% and the gross Qv = 6,989 kCal/kg (all on dry basis).
The Company will undertake a detailed exploration programme on the project in the coming months as part of its coking coal exploration strategy in the South Gobi.
George Tumur, managing director, said "Hunnu Coal is aiming to become a major force in the exploration and development of coal deposits in the world class South Gobi coal province. The acquisition of the Tsant Uul Coal Project adds to the company’s advanced Tenuun 2 and Khuree 2 Coal Projects, also located in the South Gobi."
The company is currently assessing further acquisition opportunities in the South Gobi and would hope to be able to update shareholders on these potential acquisitions over the next month.
Hunnu Coal is also pushing forward with its detailed review of the Unst Khudag Thermal Coal Mine. Discussions with a number of potential off-take partners are progressing well with the intention of commencing mine operations in 2010.
The company said An independent geologist has commenced the process of calculating a JORC compliant resource statement for historical work completed on both the Tenuun 2 Project and the Unst Khudag Coal Mine. Results should be available in the coming weeks.